stock correction coming, page-2

Market due for a correction, analyst says
ANGELA BARNES


Monday, February 05, 2007

Needed urgently: one stock market correction and soon, according to technical analyst Ron Meisels.

North American stock markets posted impressive returns last year and they have continued to do so thus far in 2007. For example, the S&P/TSX composite has gained 1.96 per cent since the year began and the Nasdaq composite index south of the border has done even better. It is up 2.31 per cent year-to-date.

But Mr. Meisels, a contributor to the http://www.na-marketletter.com website, looks at the technical picture of the markets and sees a raft of warning signs for the aging bull market. He believes that a correction is required to keep the bull market — which began in October, 2002 — in good health. “The longer the correction is delayed, the less time there will likely be for a significant rally afterwards,” he warned in a report today. “And if a multi-week correction does not occur soon then the possibility that this bull market will eventually end with a disorderly ‘bang' and not a more orderly ‘whimper' is very likely to increase,” he said.

If, as he expects, the deteriorating technical picture causes the markets to turn southwards this month, that could set the markets up for “yet another buying opportunity — which will likely be one of the best, and very possibly the last, such opportunity for 2007,” Mr. Meisels said.

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